CLSA Cuts Macau GGR Forecasts for 2027 and 2028 Citing Unsupportive China Macro Indicators

CLSA has reduced its Macau casino GGR growth forecasts for 2027 and 2028. The brokerage adopted a more cautious stance than before, citing a lack of supportive macroeconomic indicators from China despite post-event recovery.

The firm lowered its 2027 estimate by 4 percent to MOP259.2 billion (US$32.1 billion) and its 2028 forecast by 3 percent to MOP270.4 billion. Its 2026 forecast remains at MOP253.2 billion. CLSA now projects GGR growth of 2.4 percent year-on-year in 2027 and 4.3 percent in 2028. Average daily run rates are forecast at MOP710 million in 2027 and MOP739 million in 2028.

Macro Headwinds from China Industrial Profits

Notable recovery occurred in Macau GGR and visitor volume after the FIFA World Cup 2026 held from June 11 to July 19. However CLSA does not expect macros to drive incremental growth from the current revenue run-rate despite the low base effect in summer 2026 and possible mean reversion in VIP win rates.

CLSA analyst Jeffrey Kiang tied the outlook to China’s gross industrial profit indicator, the spread between producer price index and purchasing price index. The metric has led Macau year-on-year GGR percentage change by roughly six months since July 2005. Kiang stated: “Assuming such a correlation continues to hold, macro headwinds remain for Macau as the aforesaid spread has been negative since February at -0.31 percentage points.” He added: “The negative spread has widened to -3.31 percentage points in August 2026 primarily due to higher oil prices.”

The renminbi is expected to appreciate 2 percent against the US dollar in 2027, potentially acting as a tailwind for inbound volume. Macau bets are primarily in Hong Kong dollars pegged to the US dollar.

EBITDA Margin Pressures in Low-Growth Setting

CLSA expects Macau gaming EBITDA margins under pressure in 2027 because operating expenses will likely grow faster than revenue. Second-quarter 2026 results showed aggregate property-level operating expense excluding depreciation and amortisation rising 2 percent year-on-year while sector GGR declined 0.1 percent. EBITDA fell 10.7 percent year-on-year to nearly US$1.81 billion.

Kiang noted a consistent wage hike for non-managerial staff of at least 2.5 percent each year announced in 2024, 2025 and 2026. These adjustments are highly similar across the city’s six operators. As reported by GGRAsia, this makes EBITDA margin expansion highly unlikely if GGR grows at only low single digits.

Reporting: GGRAsia

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